Cars and Drivers

Tesla Gets Legislative Support for Sales in Arizona

Model_S_touchscreen
Courtesy of Tesla Motors
Through a somewhat quirky legislative rule, a committee of the Arizona State Senate on Wednesday passed a bill that would allow electric car maker Tesla Motors Inc. (NASDAQ: TSLA) to sell its vehicles directly without having to establish a distributor network in the state. This is not the final step, but it is a first step in a state that has a law dating back to 2000 that prohibits exactly what Tesla wants to do.

With sales bans in New Jersey, Colorado, Texas and, for now Arizona, Tesla has fought for acceptance of its direct sales model. Most states long ago passed laws prohibiting car makers from selling directly to consumers, proclaiming that dealers prevent manufacturers from taking advantage of consumers and that dealers promote price competition.

Arizona and Texas are both in the running for the so-called lithium-ion battery “giga-factory” that Tesla hopes to build. Perhaps the Arizona legislature sees the irony in trying to attract a company that cannot sell its products within the state’s borders.

In any event, the legislation that the state Senate’s committee approved Wednesday was introduced as House bill 2123 in January and, according to a report in the Phoenix New Times, died after passing the House without even a vote in the Senate. The bill had “absolutely nothing to do with cars at all.”

But something called the strike-everything amendment “allows [Arizona] legislators to cross out the text of an entire bill, and replace it with new text.” A completely rewritten version of House bill 2132 is what passed the Senate committee Wednesday. What the Arizona legislature does to reconcile the two different bills that have the same number should be entertaining at least.

Tesla already operates showrooms in Arizona, but it is prohibited from giving potential buyers test drives or even from talking about price. Buyers can literally kick the tires, but that is about all. To purchase a car they must go to California or order it at Tesla’s website by ponying up a $2,500 refundable deposit.

Tesla has taken pains to stress that where it chooses to build its factory is not linked at all to the company’s ability to sell cars. A lobbyist for the company is quoted at the Arizona Daily Star:

Arizona is very much in the mix [for the giga-factory]. However, having said that, I don’t want anybody to think there is any kind of quid pro quo here, that if you vote for this you’re guaranteeing this, or that if you vote against this you’re guaranteeing that.

Arizona’s nine U.S. Representatives sent Tesla CEO Elon Musk a letter on Tuesday claiming that “Arizona presents an ideal choice for this revolutionary factory.” The state legislature may want to cover that bet with a little help of its own.

Take Charge of Your Retirement In Just A Few Minutes (Sponsor)

Retirement planning doesn’t have to feel overwhelming. The key is finding expert guidance—and SmartAsset’s simple quiz makes it easier than ever for you to connect with a vetted financial advisor.

Here’s how it works:

  1. Answer a Few Simple Questions. Tell us a bit about your goals and preferences—it only takes a few minutes!
  2. Get Matched with Vetted Advisors Our smart tool matches you with up to three pre-screened, vetted advisors who serve your area and are held to a fiduciary standard to act in your best interests. Click here to begin
  3. Choose Your  Fit Review their profiles, schedule an introductory call (or meet in person), and select the advisor who feel is right for you.

Why wait? Start building the retirement you’ve always dreamed of. Click here to get started today!

 

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.

AI Portfolio

Discover Our Top AI Stocks

Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.

You can follow him investing $500,000 of his own money on our top AI stocks for free.